On January 1 Kreitzer Company issued $300,000, 7%, 10-year bonds at face value. Interest is payable annually on January 1.
Prepare journal entries to record the following events.
(a) The issuance of the bonds.
Date Account/Description Debit Credit
Jan. 1 Cash 300,000
Bonds payable 300,000
(b) The accrual of interest on December 31.
Date Account/Description Debit Credit
Dec. 31 Bond interest expense 21,000
Bond interest payable 21,000
(c) The payment of interest on January 1.
Date Account/Description Debit Credit
Jan. 1